Full Year 2021 Challenger Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kieren Chidgey - Jarden Limited, Research Division - Analyst : Just had a couple of questions around the spread margin trajectory into '22, which is signaled sort of around 2.5%, which I guess is sort of fairly stable ex the ABS one-off in second half, but just to unpack some of the moving parts, I'll be keen to get your views around a couple of the drivers. You've called out sort of life risk present value of future profits jumping quite a bit sort of in the order of 25% into year-end. What sort of benefit does that have? Sort of on my math, sort of that's around 5, 6 basis points into next year.

Question: Kieren Chidgey - Jarden Limited, Research Division - Analyst : Okay. And then on the asset mix, I mean, you've suggested the composition won't change much through '22. I just want to clarify, are you talking sort of the mix between broad asset classes or are you also talking about sort of the mix beneath the surface such as credit ratings within the cash and fixed income book?

Question: Kieren Chidgey - Jarden Limited, Research Division - Analyst : Okay. And in broad terms, is it possible to sort of quantify what the broad change in asset mix at sort of year-end relative to the average through '21 contributes in basis point terms to the margin in '22?

Question: Kieren Chidgey - Jarden Limited, Research Division - Analyst : Yes. Yes. I guess sort of the question is with life risk being stronger and the asset mix sort of assisting as well into next year, some things obviously offsetting that, which is probably the lagged impact of product margins being a bit softer. If that's all a wash sort of in '22, has that sort of lagged impact around sort of the pricing changes you've made on annuities and where your credit spreads are sitting today, has that, in your mind, fully REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 10, 2021 / 12:30AM, CGF.AX - Full Year 2021 Challenger Ltd Earnings Call worked through the book by the end of '22 or is there more risk of further pressure on some product margins beneath the surface as we look into '23?

Question: Kieren Chidgey - Jarden Limited, Research Division - Analyst : Okay. And just one final question on a different subject. The Treasury position paper that you touched on, which came out in July. Just quickly, I mean, was there anything out of that, that was sort of at the margin different to expectations? And post that, are you seeing a pickup in sort of discussions with potential clients? What's sort of the action behind the scenes in terms of people getting ready for 1 July next year?